UFP Industries, Inc. UFPI Form 10-Q filing Q2 FY2026

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UFP INDUSTRIES, INC.

Item 1. Financial Statements

See notes to unaudited interim condensed consolidated financial statements.

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UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

AND COMPREHENSIVE INCOME

(Unaudited)

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See notes to unaudited interim condensed consolidated financial statements.

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UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

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UFP INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY, CONTINUED

(Unaudited)

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See notes to unaudited interim condensed consolidated financial statements.

See notes to unaudited interim condensed consolidated financial statements.

UFP INDUSTRIES, INC.

NOTES TO UNAUDITED INTERIM

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Presentation Currency

The accompanying unaudited interim condensed consolidated financial statements are presented in United States dollars (“US dollars” or “USD”), unless otherwise indicated.

Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements (the “Financial Statements”) include our accounts and those of our wholly-owned and majority-owned subsidiaries and partnerships, and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the Financial Statements do not include all the information and footnotes normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America. All significant intercompany balances and transactions have been eliminated in consolidation.

We consolidate entities in which we have a controlling financial interest. In determining whether we have a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity (“VIE”) and whether we are the primary beneficiary. The primary beneficiary of a VIE is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. The primary beneficiary is required to consolidate the VIE. We account for unconsolidated VIEs using the equity method of accounting.

As a result of the investment in Dempsey on June 27, 2022, we own 50% of the issued equity of that entity, and the remaining 50% of the issued equity is owned by the previous owners (“Sellers”). The investment in Dempsey is an unconsolidated variable interest entity and we have accounted for it using the equity method of accounting because we do not have a controlling financial interest in the entity. Per the contracts, the Sellers have a put right to sell their equity interest to us for $50 million and we have a call right to purchase the Seller’s equity interest for $70 million, which were both first exercisable in June 2025 and expire in June 2030. As of June 27, 2026, the carrying value of our investment in Dempsey is $51.3 million, which is recorded in Other Assets on our condensed consolidated balance sheets. Our maximum exposure to loss consists of our investment amount and any contingent loss that may occur in the future as a result of a change in the fair value of Dempsey relative to the strike price of the put option.

In our opinion, the Financial Statements contain all material adjustments necessary to present fairly our consolidated financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. These Financial Statements should be read in conjunction with the annual consolidated financial statements, and footnotes thereto, included in our Annual Report to Shareholders on Form 10-K for the fiscal year ended December 27, 2025.

Seasonality has a significant impact on our working capital from March to August, which historically results in negative or modest cash flows from operations in our first and second quarters. Conversely, we experience a substantial decrease in working capital from September to February which typically results in significant cash flow from operations in our third and fourth quarters. For comparative purposes, we have included the June 28, 2025 balances in the accompanying unaudited condensed consolidated balance sheets.

UFP INDUSTRIES, INC.

Assets and Liabilities Held for Sale

We classify assets and related liabilities as held for sale when the following conditions are met: (i) management has committed to a plan to sell the net assets, (ii) the net assets are available for immediate sale, (iii) there is an active program to locate a buyer, (iv) the sale and transfer of the net assets is probable within one year, (v) the net assets are being actively marketed for sale at a price that is reasonable in relation to the current fair value, and (vi) it is unlikely that significant changes will be made to the plan to sell the net assets. Upon designation as held for sale, we record the assets and related liabilities at the lower of their carrying value or their estimated fair value, reduced for the costs to dispose of the assets and related liabilities, which we determined using the estimated proceeds from the sale.

During the second quarter of 2026, machinery and equipment and real estate within our Retail and Corporate segments met the criteria as held for sale, and therefore we have classified the related assets as held for sale on the condensed consolidated balance sheet. The fair value measurements for the assets held for sale are generally based on Level 3 inputs, which include information obtained from third-party appraisals. The assets had a carrying value of $2.6 million as of June 27, 2026, with $3.3 million of impairment charges recorded in fiscal 2025. No additional impairment charges were recorded during the second quarter of 2026. We have recognized $0.8 million of net gains on the sale of real estate and machinery and equipment that were previously classified as assets held for sale during the year and were included in net loss (gain) on disposition and impairments of assets on the condensed consolidated statements of earnings and comprehensive income.

Recently Issued Accounting Guidance

In September 2025, the FASB issued ASU 2025-06, Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU removes all references to prescriptive and sequential software development stages. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed, and the software will be used for its intended purpose. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, using a prospective, retrospective or modified transition approach, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on the consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. This ASU provides guidance to expand disclosures related to the disaggregation of income statement expenses. Also, this ASU requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses which includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. ASU 2025-01 is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on the financial statement disclosures.

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UFP INDUSTRIES, INC.

B. FAIR VALUE

We apply the provisions of ASC 820, Fair Value Measurements and Disclosures, to assets and liabilities measured at fair value. Assets measured at fair value are as follows (in thousands):

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From the assets measured at fair value as of June 27, 2026, listed in the table above, $88.1 million of money market funds are held in Cash and cash equivalents, $46.3 million of mutual funds, equity securities, fixed income funds, and alternative investments are held in Investments, $25.7 million of equity securities are held in Other assets, $0.1 million of mutual funds are held in Other assets for our deferred compensation plan, and $51.0 million of fixed income funds and $0.8 million of money market funds are held in Restricted investments. As of December 27, 2025, $207.9 million of money market funds were held in Cash and cash equivalents, $34.3 million of mutual funds, equity securities, and alternative investments were held in Investments, $28.0 million of equity securities were held in Other assets, $0.2 million of mutual funds were held in Other assets for our deferred compensation plan, and $49.9 million of fixed income funds and $0.6 million of money market funds were held in Restricted investments.

We maintain money market, mutual funds, bonds, and/or equity securities in our non-qualified deferred compensation plan, our wholly owned licensed captive insurance company, and assets held in financial institutions. These funds are valued at prices quoted in an active exchange market and are included in Cash and cash equivalents, Investments, Other assets, and Restricted investments. We have elected not to apply the fair value option under ASC 825, Financial Instruments, to any of our financial instruments except for those expressly required by U.S. GAAP.

We have $25.7 and $28.0 million of investments through our Innov8 Fund as of June 27, 2026 and December 27, 2025, respectively, which is designed to invest in emerging projects, services, and technologies. These investments are valued as Level 3 assets and are categorized as “Equity securities.” We evaluate these investments quarterly, including a qualitative assessment for indicators of impairment in accordance with ASC 321-10-35-3. During the first quarter of 2026, we concluded that one investment was fully impaired, resulting in a $4.0 million loss.

UFP INDUSTRIES, INC.

In accordance with our investment policy, our wholly-owned captive, Ardellis Insurance Ltd. (“Ardellis”), maintains an investment portfolio, totaling $96.4 million and $84.3 million as of June 27, 2026 and December 27, 2025, respectively, which has been included in the aforementioned table of total investments. This portfolio consists of domestic and international equity securities, alternative investments, and fixed income bonds.

Ardellis’ available for sale investment portfolio, including funds held with the State of Michigan, consists of the following (in thousands):

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Our fixed income investments consist of a blend of US Government and Agency bonds and investment grade corporate bonds with varying maturities. Our equity investments consist of small, mid, and large cap growth and value funds, as well as international equity. Our mutual fund investments consist of domestic and international stock. Our alternative investments consist of a private real estate income trust which is valued as a Level 3 asset. The net pre-tax unrealized gain of the portfolio was $11.6 million and $8.6 million as of June 27, 2026 and December 27, 2025, respectively. Carrying amounts above are recorded in the Investments and Restricted investments line items within the balance sheet as of June 27, 2026 and December 27, 2025.

C. REVENUE RECOGNITION

Within the three primary segments, UFP Retail Solutions (“Retail”), UFP Packaging (“Packaging”) and UFP Construction (“Construction”), that the Company operates, there are a variety of written agreements governing the sale of our products and services. The transaction price is stated at the purchase order level, which includes shipping and/or freight costs and any applicable governmental authority taxes. The majority of our contracts have a single performance obligation concentrated around the delivery of goods to the carrier, Free On Board (FOB) shipping point. Therefore, revenue is recognized when this performance obligation is satisfied. Generally, title and control passes at the time of shipment. In certain circumstances, the customer takes title when the shipment arrives at the destination. However, our shipping process is typically completed the same day.

Certain customer products that we provide require installation by the Company or a third party. Installation revenue is recognized upon completion. If we use a third party for installation, the party will act as an agent to us until completion of the installation. Installation revenue represents an immaterial share of our total net sales.

We utilize rebates, credits, discounts and/or cash-based incentives with certain customers which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration. The allocation of these costs are applied at the invoice level and recognized in conjunction with revenue. Additionally, returns and refunds are estimated on a historical and expected basis which is a reduction of revenue recognized.

Earnings on construction contracts are reflected in operations using over time accounting, under either cost to cost or units of delivery methods, depending on the nature of the business at individual operations, which is in accordance with ASC 606 as revenue is recognized when certain performance obligations are performed. Under over time accounting using the cost to cost method, revenues and related earnings on construction contracts are measured by the relationships of actual costs incurred relative to the total estimated costs. Under over time accounting using the units of delivery method, revenues and related earnings on construction contracts are measured by the relationships of actual units produced relative to the total number of units. Revisions in earnings estimates on the construction contracts are recorded in the accounting period in which the basis for such revisions becomes known. Projected losses on individual contracts are charged to operations in their entirety when such losses become apparent.

UFP INDUSTRIES, INC.

Our construction contracts are generally entered into with a fixed price, and completion of the projects can range from 6 to 18 months in duration. Therefore, our operating results are impacted by, among many other things, labor rates and commodity costs. During the year, we update our estimated costs to complete our projects using current labor and commodity costs and recognize losses to the extent that they exist.

The following table presents our net sales disaggregated by revenue source (in thousands):

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The Construction segment comprises the construction contract revenue shown above. Construction contract revenue is primarily made up of site-built and framing customers.

The following table presents the account balances associated with over time revenue which are included in Other current assets and Other accrued liabilities, respectively (in thousands):

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D. EARNINGS PER SHARE

The computation of earnings per share (“EPS”) is as follows (in thousands):

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E. COMMITMENTS, CONTINGENCIES, AND GUARANTEES

We are self-insured for environmental impairment liability, including certain liabilities which are insured through a wholly owned subsidiary, Ardellis Insurance Ltd., a licensed captive insurance company.

On June 27, 2026, we were parties either as plaintiff or defendant to a number of lawsuits and claims arising through the normal course of our business. In the opinion of management, our consolidated financial statements will not be materially affected by the outcome of these contingencies and claims.

UFP INDUSTRIES, INC.

On June 27, 2026, we had outstanding purchase commitments on commenced capital projects of approximately $108 million.

We provide a variety of warranties for products we manufacture. Historically, warranty claims have not been material. We also distribute products manufactured by other companies. While we do not warrant these products, we have received claims as a distributor of these products when the manufacturer no longer exists or no longer has the ability to pay. Historically, these costs have not had a material effect on our consolidated financial statements.

As part of our operations, we supply building materials and labor to site-built construction projects or we jointly bid on contracts with framing companies for such projects. In some instances, we are required to post payment and performance bonds to ensure the products and installation services are completed in accordance with our contractual obligations. We have agreed to indemnify the surety for claims properly made against these bonds. As of June 27, 2026, we had approximately $50.2 million in outstanding payment and performance bonds for open projects. We had approximately $7.5 million in payment and performance bonds outstanding for completed projects which are still under warranty.

On June 27, 2026, we had outstanding letters of credit totaling $43.1 million, primarily related to certain insurance contracts, industrial development revenue bonds, and other debt agreements described further below.

In lieu of cash deposits, we provide irrevocable letters of credit in favor of our insurers and other third parties to guarantee our performance under certain insurance contracts and other legal agreements. As of June 27, 2026, we have irrevocable letters of credit outstanding totaling approximately $39.8 million for these types of arrangements. We have reserves recorded on our balance sheet, in accrued liabilities, that reflect our expected future liabilities under those insurance arrangements.

We are required to provide irrevocable letters of credit in favor of the bond trustees for all industrial development revenue bonds that have been issued. These letters of credit guarantee principal and interest payments to the bondholders. We currently have irrevocable letters of credit outstanding totaling approximately $3.3 million related to our outstanding industrial development revenue bonds. These letters of credit have varying terms but may be renewed at the option of the issuing banks.

Certain wholly owned domestic subsidiaries have guaranteed the indebtedness of UFP Industries, Inc. in certain debt agreements, including the Series 2018 and 2020 Senior Notes and our revolving credit facility. The maximum exposure of these guarantees is limited to the indebtedness outstanding under these debt arrangements and this exposure will expire concurrent with the expiration of the debt agreements.

We did not enter into any new guarantee arrangements during the second quarter of 2026 which would require us to recognize a liability on our balance sheet.

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UFP INDUSTRIES, INC.

F. BUSINESS COMBINATIONS

We completed the following acquisitions during the first six months of 2026 and during fiscal 2025, which were accounted for using the purchase method (in thousands):

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The estimated fair values of assets acquired and liabilities assumed are based on available information at the acquisition date and assumptions deemed reasonable by management, supplemented by the expertise of third-party valuation specialists engaged to assist in determining fair value for intangible assets, including goodwill. As of June 27, 2026, the fair value determination of the intangible assets for the above business combinations has not been finalized, with the exception of RWP West which was finalized during the second quarter of 2026. Therefore, changes in facts and circumstances may result in adjustments to the initial fair value estimates during the measurement period, which may not exceed one year from the acquisition date.

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The business combinations mentioned above contributed approximately $41.0 million to net sales and a $0.6 million operating loss during the first six months of 2026. They are not significant to our operating results and thus proforma results for 2026 and 2025 are not presented.

G. SEGMENT REPORTING

ASC 280, Segment Reporting (“ASC 280”), defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our CODM is the chief executive officer, as he has the ultimate decision-making authority related to assessing the Company’s performance and allocating resources. The CODM assesses performance for our segments and decides how to allocate resources based on net sales, cost of goods sold, earnings from operations and net earnings. These metrics are also reported on the Consolidated Statement of Earnings and Comprehensive Income. The measure of segment assets is reported on the Consolidated Balance Sheet as total consolidated assets. The CODM uses earnings from operations and net earnings to evaluate income generated from segment assets (return on investment) in determining wage increase allocations and bonus pools, and in deciding whether to reinvest profits into the business, such as for acquisitions, or to pay dividends.

UFP INDUSTRIES, INC.

We operate manufacturing, treating and distribution facilities internationally, but primarily in the United States. Our business segments consist of Retail, Packaging and Construction and align with the end markets we serve. This segment structure allows for a specialized and consistent sales approach among Company operations, efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of our individual locations primarily through a market-centered reporting structure under which each location is included in a business unit and business units are included in our Retail, Packaging, and Construction segments. In the case of locations that serve multiple segments, results are allocated and accounted for by segment.

The exception to this market-centered reporting and management structure is our International segment, which comprises our packaging operations in Mexico, Canada, Spain, India, and Australia and sales and buying offices in other parts of the world, and our Ardellis segment, which represents our wholly owned fully licensed captive insurance company based in Bermuda. Our International and Ardellis segments do not meet the quantitative thresholds in order to be separately reported and accordingly, the International and Ardellis segments have been aggregated in the “All Other” segment for reporting purposes.

“Corporate” includes purchasing, transportation, corporate ventures, and administrative functions that serve our operating segments. Operating results of Corporate primarily consist of over (under) allocated costs and net sales to external customers initiated by UFP Purchasing, which manages supplier relationships and purchases lumber and other materials, UFP Transportation, which owns, leases, and operates transportation equipment, and UFP Real Estate, which owns and leases real estate. Inter-company lease and service charges are assessed to our operating segments for the use of these assets and services at fair market value rates. Total assets of the Corporate segment include unallocated cash and cash equivalents, certain prepaid assets, and certain property, equipment and other assets pertaining to the centralized activities of Corporate, UFP Real Estate, Inc., UFP Transportation, Inc., and UFP Purchasing, Inc. Real estate activities are conducted by the real estate company on behalf of the segments, and capital expenditures associated with real estate are allocated to the segments.

The tables below are presented in thousands:

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UFP INDUSTRIES, INC.

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UFP INDUSTRIES, INC.

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The following table presents goodwill by segment as of June 27, 2026, and December 27, 2025 (in thousands):

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UFP INDUSTRIES, INC.

The following table presents our disaggregated net sales by business unit for each segment for the three and six months ended June 27, 2026, and June 28, 2025 (in thousands).

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H. INCOME TAXES

Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for foreign, state and local income taxes and permanent tax differences. Our effective tax rate was 26.3% in the second quarter of 2026 compared to 23.6% in the same period of 2025 and was 25.3% in the first six months of 2026 compared to 22.5% for the same period in 2025. The increase in our effective tax rate for the second quarter and for the first six months of 2026 was primarily due to $3.0 million of state income tax benefits recorded as discrete items in the second quarter of 2025 resulting from an approved reduction in our tax rate in Texas and job credits in South Carolina, and a decrease in our tax deduction from stock-based compensation accounted for as a permanent difference.

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UFP INDUSTRIES, INC.

I. COMMON STOCK

Below is a summary of common stock issuances for the first six months of 2026 and 2025 (in thousands, except average share price):

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During the first six months of 2026, we repurchased 1,669,770 shares of our common stock at an average share price of $84.95.

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During the first six months of 2025, we repurchased approximately 2,523,339 shares of our common stock at an average share price of $103.63.

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J. INVENTORIES

Inventories are stated at the lower of cost or net realizable value. The cost of inventories includes raw materials, direct labor, and manufacturing overhead and is determined using the weighted average cost method. Raw materials consist primarily of unfinished wood products and other materials expected to be manufactured or treated prior to sale, while finished goods represent various manufactured and treated wood products ready for sale.

We write down the value of inventory, the impact of which is reflected in cost of goods sold in the Condensed Consolidated Statements of Earnings and Comprehensive Income, if the cost of specific inventory items on hand exceeds the amount we expect to realize from the ultimate sale or disposal of the inventory. These estimates are based on management's judgment regarding future demand and market conditions and analysis of historical experience.

UFP INDUSTRIES, INC.

K. SUBSEQUENT EVENTS

Subsequent to our reporting date, we repurchased 125,000 shares for $10.4 million, resulting in an average share price of $83.05.

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UFP INDUSTRIES, INC.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

UFP Industries, Inc. is a holding company with subsidiaries in North America, Europe, Asia, and Australia that design, manufacture, and supply products made from wood, wood and non-wood composites, and other materials to three segments: retail, packaging, and construction. We are headquartered in Grand Rapids, Michigan. Our business segments are functionally interdependent and are supported by common corporate services, such as accounting and finance, information technology, human resources, marketing, purchasing, transportation, legal and compliance, among others. We regularly invest in automation and implement best practices to improve the efficiency of our manufacturing facilities across each of the segments. The results and improvements from these investments are shared among the segments. This exchange of ideas drives faster innovation for new products, processes, and product improvements.

Importantly, our structure allows us to evaluate market conditions and opportunities, while effectively allocating capital and resources to the appropriate segments and business units. We believe that the diversification and manner in which we operate our business segments provides an inherent hedge against the inevitable business cycles that our markets experience and over which we have little control. Accordingly, our goal is to provide stable earnings and cash flows to our shareholders. Our diversification and operating practices also mitigate the impact of volatile lumber market conditions experienced by traditional lumber companies.

This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. We do not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in currency and inflation; fluctuations in the price of lumber; adverse economic conditions in the markets we serve; changes in tariffs, import/export regulations, and other trade policies; concentration of sales to customers; the success of vertical integration strategies; excess capacity or supply chain challenges; our ability to make successful business acquisitions; government regulations, particularly involving environmental and safety regulations; adverse or unusual weather conditions; inbound and outbound transportation costs; alternatives to replace treated wood products; cybersecurity breaches; artificial intelligence; and potential pandemics. Certain of these risk factors as well as other risk factors and additional information are included in our reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.

OVERVIEW

Our results for the second quarter of 2026 include the following highlights:

• Our net sales increased 3% compared to the second quarter of 2025, consisting of a 1% increase in organic unit sales (excluding growth from acquisitions within the last 12 months) and a 2% increase attributable to acquisitions. Organic unit sales increased 4% in our packaging segment, partially offset by a 2% decrease in our construction segment and a 1% decrease in our retail segment. Acquired businesses contributed 4%, 2%, and 1% unit increases in our packaging, retail, and construction segments, respectively. Overall selling prices were flat as higher selling prices in our ProWood business unit, driven by the pass-through of higher commodity lumber costs to customers, were offset by competitive pricing pressure in our Site Built business unit.

UFP INDUSTRIES, INC.

• Our gross profit decreased by $23 million, or 7%, compared to the same period of the prior year. By segment, gross profit decreased by $10 million in Construction, $10 million in Packaging, and $3 million in Corporate, while Retail increased by $1 million and All Other remained flat. The overall decrease in our gross profit is primarily due to higher transportation costs across all of the business units. The impact of weaker demand on volumes and pricing in our Site Built and Pallet One was more than offset by improvements in our other business units.
• Our operating profits decreased $20 million, or 16%, compared to the second quarter of 2025. The overall decrease is a result of the decrease in gross profit mentioned above and a $1 million increase in selling, general, and administrative (“SG&A”) expenses, partially offset by a $4 million decrease in net losses on the disposition and impairment of assets. The increase in SG&A is due to acquired business and professional and legal fees associated with acquisitions.
• Our cash flows from operations were $61 million in the first six months of 2026 compared to $113 million during the first six months of 2025. The $52 million decline resulted from a decrease in net earnings and non-cash expenses of $50 million and an increase in our investment in net working capital since year end that was $2 million higher in the first six months of 2026 than it was in the first six months of 2025. We anticipate that this increase in net working capital will convert to cash by early in the fourth quarter as we move past the typical seasonal peak in our net working capital.
• Our Cash and cash equivalents at the end of June 2026 was $597 million compared to $842 million at the end of June 2025. The decline in our cash is primarily due to share repurchase activity and recent business acquisitions. Our unused borrowing capacity under our revolving credit facility and a shelf agreement with certain lenders along with our cash resulted in total liquidity of approximately $1.9 billion at the end of the second quarter of 2026.

HISTORICAL LUMBER PRICES

We experience significant fluctuations in the cost of commodity lumber products from primary producers (“Lumber Market”). The following table presents the Random Lengths framing lumber composite price:

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UFP INDUSTRIES, INC.

In addition, a Southern Yellow Pine (“SYP”) composite price, which we prepare and use, is presented below. Our purchases of this species comprise approximately 76% of our total lumber purchases.

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Finally, a Spruce Pine Fir (“SPF”) composite price, which we prepare and use, is presented below. Our purchases of this species comprise approximately 11% of our total lumber purchases.

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Lumber prices increased during the second quarter of 2026, after declining during the first quarter. Commodity lumber costs increased due to mill curtailments and higher duties on Canadian lumber, partially offset by weak overall demand resulting from lower consumer sentiment and greater economic uncertainty.

A change in lumber prices impacts profitability of products sold with fixed and variable prices, as discussed below.

UFP INDUSTRIES, INC.

IMPACT OF THE LUMBER MARKET ON OUR OPERATING RESULTS

We generally price our products to pass lumber costs through to our customers so that our profitability is based on the value-added manufacturing, distribution, engineering, and other services we provide. As a result, our dollar sales levels (and working capital requirements) are impacted by the lumber costs of our products. Lumber costs were 43.7% and 42.9% of our total net sales in the first six months of 2026 and 2025, respectively.

Our gross margins are impacted by (1) the relative level of the Lumber Market (i.e. whether prices are higher or lower from comparative periods), and (2) the trend in the market price of lumber (i.e. whether the price of lumber is increasing or decreasing within a period or from period to period). Additionally, as explained below, product categories can be priced differently. Some of our products have fixed selling prices, while the selling prices of other products are indexed to the reported Lumber Market with a fixed dollar adder to cover conversion costs and profits. Consequently, the level and trend of the Lumber Market impact our products differently.

Below is a general description of the primary ways in which our products are priced.

• Products with fixed selling prices. These products include value-added products, such as manufactured items, sold within all segments. Prices for these products are generally fixed at the time of the sales quotation for a specified period of time. In order to reduce any exposure to adverse trends in the price of component lumber products, we attempt to lock in costs with our suppliers or purchase necessary inventory for these sales commitments. The time period limitation eventually allows us to periodically re-price our products for changes in lumber costs from our suppliers.
• Products with selling prices indexed to the reported Lumber Market with a fixed dollar “adder” to cover conversion costs and profit. These products primarily include treated lumber, panel goods, other commodity-type items, and trusses sold to the manufactured housing industry. For these products, we estimate customers’ needs and carry appropriate levels of inventory. Because lumber costs are incurred in advance of final sale prices, subsequent increases or decreases in the market price of lumber impact our gross margins. We believe our sales of these products are at their highest relative level in our second quarter, primarily due to pressure-treated lumber sold in our retail segment.

For each of the product pricing categories above, our margins are exposed to changes in the trend of lumber prices. As a result of the balance in our net sales to each of our end markets, we believe our gross profit is more stable compared to our competitors who are less diversified.

The greatest risk associated with changes in the trend of lumber prices is on the following products:

• Products with significant inventory levels with low turnover rates, whose selling prices are indexed to the Lumber Market. In other words, the longer the period of time these products remain in inventory, the greater the exposure to changes in the price of lumber. This includes treated lumber, which comprised approximately 22% of our total net sales in the first six months of 2026. This exposure is less significant with remanufactured lumber, panel goods, other commodity-type items, and trusses sold to the manufactured housing market due to the higher rate of inventory turnover. We attempt to mitigate the risk associated with treated lumber through managed inventory programs with our vendors. We estimate that 21% of our total purchases for the first six months of 2026 were transacted under these programs. (Please refer to the “Risk Factors” section of our annual report on form 10-K, filed with the United States Securities and Exchange Commission.)
• Products with fixed selling prices sold under long-term supply arrangements, particularly those involving multi-family construction projects. We attempt to mitigate this risk through our purchasing practices and longer vendor commitments.

UFP INDUSTRIES, INC.

In addition to the impact of Lumber Market trends on gross margins, changes in the level of the market cause fluctuations in gross margins when comparing operating results from period to period. This is explained in the following example, which assumes the price of lumber has increased from period one to period two, with no changes in the trend within each period.

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As is apparent from the preceding example, the level of lumber prices does not impact our overall profits but does impact our margins. Gross margins and operating margins are negatively impacted during periods of high lumber prices; conversely, we experience margin improvement when lumber prices are relatively low.

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IMPACT OF TARIFFS ON OUR OPERATING RESULTS

The trade landscape continues to evolve. Since we do not own any foreign sawmills and have excellent relationships with our mill partners, we believe we are currently in a strong position to adapt quickly to tariffs without material adverse financial impact after a short adjustment period. We will continue to monitor the market and intend to make decisions quickly to minimize disruption. As of June 27, 2026, 84% of our lumber purchases were from domestic suppliers, 9% were imported from Canada, and 7% were imported from other international suppliers.

In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”), which the U.S. administration relied on to impose certain tariffs, does not authorize the administration to impose tariffs. As a result of this ruling, the U.S. Court of International Trade (“CIT”) issued an order directing the U.S. Customs and Border Protection (“CBP”) agency to begin formalizing a process for refunds. As of June 27, 2026, we have received $3 million in tariff refunds and recorded a receivable of $20 million related to the expected refund of tariffs previously paid under the IEEPA, including applicable interest, with the corresponding offsets of $20 million to Cost of goods sold, $1 million to interest income, and $2 million as a reduction to the carrying value of inventory on hand. We have certain contractual obligations that will require us to refund customers certain of the tariff refunds we receive. If we collect the entire $23 million of tariffs paid pursuant to the IEEPA, we will be required to refund approximately $11 million to customers. As a result, we recorded $11 million as a liability as of June 27, 2026, with a corresponding reduction to Net sales. Of the $9 million net increase in Earnings from operations relating to these tariff refunds, $6 million related to products sold in the current quarter and $3 million related to products sold in prior quarters. Subsequent to June 27, 2026, we received approximately $18 million of the tariff refund receivable, including related interest.

IMPACT OF HIGHER TRANSPORTATION COSTS ON OUR OPERATING RESULTS

A combination of macroeconomic and geopolitical events and capacity constraints in the flatbed carrier market have contributed to an increase in our input costs across the enterprise, primarily related to fuel and transportation. In the second quarter of 2026, we estimate that we incurred an additional $31 million of these costs which adversely impacted our profitability reflecting increased fuel costs and flatbed carrier rates as a result of many small carriers exiting the market. This has increased our cost in the “spot” market with market rates up over 30% excluding fuel. These market conditions have resulted in $6 million in additional fuel costs and $25 million in higher flatbed carrier costs. Our efforts to pass through these higher costs to our customers have been concentrated on fuel and through surcharges and increased product pricing, which resulted in an offset totaling approximately $4 million for the quarter. We plan to negotiate with our customers to pass through the remaining increase in our transportation costs, however, there are factors beyond our control, including contract terms and market conditions, that may impact our ability to be successful in these efforts. Please see “Risk Factors” below for more information.

UFP INDUSTRIES, INC.

BUSINESS COMBINATIONS AND ASSET PURCHASES

We completed three business combinations in the second quarter of 2026 and two in fiscal 2025. The annual historical sales attributable to these acquisitions are approximately $183 million in aggregate. These business combinations are not significant to our quarterly results and thus proforma results for 2026 and 2025 are not presented. See Notes to the Unaudited Interim Condensed Consolidated Financial Statements, Note F, “Business Combinations” for additional information.

RESULTS OF OPERATIONS

The following table presents, for the periods indicated, the components of our Unaudited Condensed Consolidated Statements of Earnings as a percentage of net sales.

Note: Actual percentages are calculated and may not sum to total due to rounding.

As a result of the impact of the level of lumber prices on the percentages displayed in the table above (see Impact of the Lumber Market on Our Operating Results), we believe it is useful to compare our change in units sold with our change in gross profit, selling, general, and administrative expenses, and operating profits as presented in the following table.

The following table presents, for the periods indicated, our selling, general, and administrative (SG&A) costs as a percentage of gross profit. Over time, we believe this ratio provides an enhanced view of our effectiveness in managing these costs given our strategies to enhance our capabilities and improve our value-added product offering and recognizing the higher relative level of SG&A these strategies require. This ratio also mitigates the impact of changing lumber prices. The increase in the ratio of SG&A as a percentage of gross profit from the prior year is primarily due to the impact of weak consumer demand reflecting lower selling prices as well as higher transportation costs, which have reduced our gross profit.

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UFP INDUSTRIES, INC.

Operating Results by Segment:

Our business segments consist of Retail, Packaging and Construction, and align with the end markets we serve. Among other advantages, this structure allows for a specialized and consistent sales approach, more efficient use of resources and capital, and quicker introduction of new products and services. We manage the operations of our individual locations primarily through a market-centered reporting structure under which each location is included in a business unit, and business units are included in our Retail, Packaging, and Construction segments. The exception to this market-centered reporting and management structure is our International segment, which comprises our packaging operations in Mexico, Canada, Spain, India, and Australia and sales and buying offices in other parts of the world. Our International segment and Ardellis (our insurance captive) are included in “All Other” in the table below. The “Corporate” segment includes purchasing, transportation, corporate ventures, and administrative functions that serve our operating segments. Operating results of Corporate primarily consists of over (under) allocated costs and net sales to external customers initiated by UFP Purchasing, which manages supplier relationships and purchases lumber and other materials, UFP Transportation, which owns, leases and operates transportation equipment, and UFP Real Estate, which owns and leases real estate. Inter-company lease and service charges are assessed to our operating segments for the use of these assets and services at fair market value rates.

The following tables present our operating results, for the periods indicated, by segment (in thousands).

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UFP INDUSTRIES, INC.

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The following tables present the components of our operating results, for the periods indicated, as a percentage of net sales by segment.

Note: Actual percentages are calculated and may not sum to total due to rounding.

UFP INDUSTRIES, INC.

Note: Actual percentages are calculated and may not sum to total due to rounding.

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Note: Actual percentages are calculated and may not sum to total due to rounding.

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Note: Actual percentages are calculated and may not sum to total due to rounding.

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UFP INDUSTRIES, INC.

NET SALES

We design, manufacture and market wood and wood-alternative products, primarily used to enhance outdoor living environments; for national home centers and other retailers; for engineered wood components, structural lumber, and other products for factory-built and site-built residential and commercial construction; customized interior fixtures used in a variety of retail stores, commercial, and other structures; and structural wood packaging, components and packing materials for various industries. Our strategic long-term sales objectives include:

• Maximizing unit sales growth while achieving return on investment goals. The following table presents estimates, for the periods indicated, of our percentage change in net sales attributable to changes in overall selling prices versus changes in units shipped by segment.

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• Expanding geographically in our higher margin core businesses.
• Increasing our sales of “value-added” products and enhancing our product offering with new or improved products. Value-added products generally consist of fencing, decking, lattice, and other specialty products sold in the Retail segment; structural and protective packaging and machine-built pallets sold in the Packaging segment; engineered wood components, customized interior fixtures, manufactured and assembled concrete forms sold in the Construction segment; and “wood alternative” products. Engineered wood components include roof trusses, wall panels, and floor systems. Wood-alternative products consist of products manufactured with wood and non-wood composites, metals and plastics sold in each of our segments. Although we consider the treatment of dimensional lumber and panels with certain chemical preservatives a value-added process, treated lumber is not presently included in the value-added sales totals. Remanufactured lumber and panels that are components of finished goods are also generally categorized as “commodity-based” products. We estimate that approximately 80% of our sales consist of products we manufacture at our locations, while 20% of our sales consist of products manufactured by suppliers that we inventory and distribute to customers.

UFP INDUSTRIES, INC.

The following table presents, for the periods indicated, our percentage of value-added and commodity-based sales to total sales by our segments:

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Our overall unit sales of value-added products were up 4% in the second quarter and down 1% in the first six months of 2026 compared to the prior year. Our overall unit sales of commodity-based products were flat in the second quarter and down 3% in the first six months of 2026 compared to the prior year.

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• Developing new products. We define new products as those that will generate sales of at least $1 million per year within 4 years of launch and are still growing and gaining market penetration and meet our internal definition of value-added products. New product sales in the second quarter and first six months of 2026 increased 33% and 26%, respectively. The increase in the second quarter was primarily attributable to sales of Venture and Surestone™ decking products in our Retail segment, mixed-material products for a key national customer in our Packaging segment, and exterior siding and cladding products, light-gauge metal components, and concrete forming products in our Construction segment. Approximately $13.8 million of new product sales for the first six months of 2025, while they continue to be sold, were sunset in 2026 and excluded from the table below because they no longer meet the definition above. Our short-term goal is to achieve annual new product sales of at least $560 million in 2026. For the first six months of 2026, new product sales totaled $272 million. Our long-term goal is for new products to comprise at least 10% of our total net sales.

The table below presents new product sales in thousands:

UFP INDUSTRIES, INC.

Retail Segment

Net sales in the second quarter of 2026 increased by 4% compared to the same period of 2025 due to a 3% increase in selling prices and a 2% increase due to acquisitions, partially offset by a 1% decrease in organic unit sales. Organic unit changes within this segment consisted of a 17% decrease in Edge and a 1% decrease in ProWood, partially offset by a 9% increase in Deckorators. Of the 25% year over year increase in net sales for our Deckorators business unit, wood-plastic composite decking and mineral-based-composite decking (sold under our new Surestone tradename) increased 85% and 37%, respectively. An acquired business contributed 13% in sales growth to Deckorators and 51% in sales growth to wood-plastic composite decking sales. These increases were partially offset by railings which declined 17%. Our unit sales to big box customers, which we believe are more closely correlated with repair and remodel activity, increased approximately 2%, while unit sales to independent retailers, which we believe are more closely correlated to new housing starts, decreased approximately 2%. The decline in ProWood volume is primarily due to weaker consumer sentiment and economic uncertainty resulting in a softening of demand to complete repair and remodel projects.

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Gross profit increased by $1 million, or 1% to $115 million for the second quarter of 2026 compared to the same period of 2025. The change in gross profit was attributable to the following:

• The gross profit of our Edge business unit improved by $3 million as a result of cost savings from the closure of the Bonner, MT facility and restructuring of this business unit which led to operational improvements.
• The gross profit of our Deckorators business unit increased by $1 million despite higher transportation costs. This business unit continues to make progress optimizing new capacity and we anticipate a higher profit contribution on growth in future quarters.
• The gross profit of our ProWood pressure-treated products decreased by $3 million, due to higher transportation costs.

SG&A increased by $4 million, or 7%, in the second quarter of 2026 compared to the same period of 2025. The increase was caused by a $1 million increase due to acquired operations, a $1 million increase in professional fees, and a $2 million increase in expenses across several other categories. Accrued bonus expense, which varies with overall profitability and return on investment of the segment remained flat from the second quarter of 2025 and totaled $15 million for the quarter.

Earnings from operations decreased in the second quarter of 2026 compared to the same period of 2025 by $4 million, or 7%, as a result of the factors mentioned above.

Net sales in the first six months of 2026 decreased by 3% compared to the same period of 2025, due to a 6% decrease in organic units, partially offset by a 2% increase in selling prices and a 1% increase due to acquisitions. Organic unit changes within this segment consisted of decreases of 18% in Edge and 7% in ProWood, partially offset by a 5% increase in Deckorators. Within our Deckorators business unit, our mineral-based-composite decking sales increased by 33% as consumers continue to see the benefits of its superior product attributes, and wood-plastic composite decking increased by 51%. An acquired business contributed an additional 9% in sales growth to Deckorators and 30% in sales growth to wood-plastic composite decking sales. These increases were partially offset by a 13% decrease in railing sales. Unit sales to big box customers decreased approximately 5%, while unit sales to independent retailers decreased approximately 4%.

UFP INDUSTRIES, INC.

Gross profit remained flat for the first six months of 2026 compared to the same period in 2025. The components of gross profit were as follows:

• The gross profit of our ProWood business unit decreased $7 million, primarily due to a decline in unit sales in the first quarter and higher transportation costs in the second quarter.
• The gross profit of our Edge business unit improved by $4 million as a result of cost savings from the closure of the Bonner, MT facility and restructuring of this business unit which led to operational improvements.
• The gross profit of our Deckorators business unit increased by $3 million despite higher transportation costs.

SG&A increased by approximately $5 million, or 4%, in the first six months of 2026 compared to the same period of 2025. The overall increase was due to a $1 million increase due to acquired operations, a $2 million increase in professional fees, and a $3 million increase in expenses across several other categories. These increases were partially offset by a decline in accrued bonus expense of $1 million, which totaled $24 million for the first six months of 2026.

Earnings from operations decreased in the first six months of 2026 compared to the same period of 2025 by $6 million, or 7%, as a result of the factors mentioned above.

Packaging Segment

Net sales in the second quarter of 2026 increased 7% compared to the same period of 2025, due to a 4% increase in organic unit sales and a 4% contribution from business acquisitions. These increases were partially offset by a 1% decrease in selling prices. Organic unit changes consist of a 15% increase in Protective Packaging and an 8% increase in Structural Packaging, partially offset by a 3% decrease in PalletOne. Acquisitions contributed an additional 12% in unit sales growth to PalletOne.

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Gross profit decreased by $10 million, or 14%, for the second quarter of 2026 compared to the same period of 2025. The change in gross profit was attributable to the following:

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• The gross profit of our PalletOne business unit decreased by $6 million primarily due to increased material and transportation costs.
• The gross profit of our Structural Packaging business unit decreased by $3 million due to an increase in transportation costs, partially offset by organic unit growth.
• The gross profit of our Protective Packaging business unit decreased by $1 million compared to the same period of 2025, resulting from unabsorbed manufacturing overhead costs associated with two new greenfield locations.

SG&A increased by approximately $2 million, or 6%, in the second quarter of 2026 compared to the same period of 2025. The increase is attributable to a one-time write-off on an earnout liability in 2025 for $2 million, a $1 million increase due to acquired operations, and a $1 million increase in expenses across several other categories. The increases were offset by accrued bonus expense, which decreased approximately $2 million relative to the same period of 2025 and totaled $6 million for the quarter.

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Earnings from operations decreased in the second quarter of 2026 compared to the same period of 2025 by $12 million, or 44%, due to the factors discussed above.

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Net sales in the first six months of 2026 increased 2% compared to the same period of 2025, due to acquired businesses which contributed 3% to unit growth, partially offset by a 1% decrease in selling prices. Organic unit changes consist of a 10% increase in Protective Packaging and a 4% increase in Structural Packaging, offset by a 7% decrease in PalletOne. Acquisitions contributed an additional 7% in unit sales growth to PalletOne.

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Gross profit decreased by $19 million, or 14%, for the first six months of 2026 compared to the same period in 2025. The change in gross profit was attributable to the following.

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UFP INDUSTRIES, INC.

• The gross profit of our PalletOne business unit decreased by $11 million primarily due to weak demand and increased material and transportation costs.
• The gross profit of our Structural Packaging business unit decreased by $6 million primarily due to higher transportation costs.
• The gross profit of our Protective Packaging business unit decreased $2 million compared to the same period of 2025, resulting from unabsorbed manufacturing overhead costs associated with two new greenfield locations.

SG&A remained flat for first six months of 2026 compared to the same period of 2025. Accrued bonus expense decreased $4 million, and totaled $12 million for the six months of 2026. The decrease was offset by a one-time write off on an earnout liability in 2025 for $2 million, a $1 million increase due to acquired businesses, and a $1 million increase in bad debt expense.

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Earnings from operations decreased in the first six months of 2026 compared to the same period 2025 by $18 million, or 38%, due to the factors discussed above, partially offset by a decrease in the net loss on disposition and impairment of assets, which primarily related to a $1 million lease impairment in 2025.

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Construction Segment

Net sales in the second quarter of 2026 decreased 4% compared to the same period of 2025 due to a 3% decrease in selling prices due to competitive price pressure in our Site-Built business unit and a 2% decrease in organic unit sales, partially offset by a 1% contribution from acquisitions. We experienced organic unit sales decreases of 6% in Factory Built and 3% in Site-Built due to weaker demand for housing, which was partially offset by an 11% increase in Commercial and a 6% increase in Concrete Forming.

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Gross profit decreased by $10 million, or 10%, in the second quarter of 2026 compared to the same period of 2025. The change in our gross profit was attributable to the following:

• The gross profit of our Site-Built housing business unit decreased by $15 million, primarily due to weak demand and competitive pricing as housing starts have declined due to affordability challenges and economic uncertainty.
• The gross profit of our Factory-Built business unit decreased by $2 million primarily due to lost market share of certain low margin commodity products.
• The gross profit of our Commercial construction business unit increased by $6 million due to an increase in unit sales and productivity improvements.
• The gross profit of our Concrete-Forming business unit increased by $1 million due to an increase in unit sales.

SG&A remained flat in the second quarter of 2026 compared to the same period of 2025. Accrued bonus expense decreased by $2 million and totaled $9 million for the quarter. The decrease in accrued bonus expense was offset by increases of $1 million in wages and benefits and $1 million in travel expenses.

Earnings from operations decreased in the second quarter of 2026 compared to the same period of 2025 by $10 million, or 27%, due to the factors mentioned above.

Net sales in the first six months of 2026 decreased 7% compared to the same period of 2025 and consisted of a 4% decrease in selling prices and a 4% decrease in unit organic sales, partially offset by a 1% contribution from acquisitions. Organic unit changes within this segment consist of decreases of 7% in Factory Built and 8% in Site Built, partially offset by increases of 13% in Commercial and 10% in Concrete Forming.

Gross profit decreased by $23 million, or 12%, for the first six months of 2026 compared to the same period of 2025. The change in our gross profit was attributable to the following:

UFP INDUSTRIES, INC.

• The gross profit of our Site-Built housing business unit decreased by $34 million, primarily due to weak demand and competitive pricing as housing starts have declined primarily due to affordability challenges and economic uncertainty.
• The gross profit of our Commercial construction business unit increased by $10 million due higher volumes and productivity improvements.
• The gross profit of our Concrete-Forming business unit increased by $1 million due to an increase in unit sales.
• The gross profit of our Factory-Built business unit remained flat.

SG&A decreased by approximately $1 million, or 1%, in the first six months of 2026 compared to the same period of 2025. Accrued bonus expenses decreased $5 million and totaled $15 million for the first six months of 2026. The decrease in SG&A was partially offset by increases in wages and benefits totaling $2 million, professional fees totaling $1 million and travel expenses totaling $1 million.

Earnings from operations decreased in the first six months of 2026 compared to the same period of 2025 by $22 million, or 35%, due to the factors mentioned above.

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All Other Segment

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Our All Other reportable segment consists of our International and Ardellis (our insurance captive) segments that are not significant.

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Corporate

The corporate segment consists of over (under) allocated costs that are not significant and net sales to external customers initiated by UFP Purchasing, UFP Transportation, and UFP Real Estate. In 2026 we modified our cost allocation methods to more closely approximate actual.

INCOME TAXES

Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for foreign, state and local income taxes and permanent tax differences. Our effective tax rate was 26.3% in the second quarter of 2026 compared to 23.6% in the same period of 2025 and was 25.3% in the first six months of 2026 compared to 22.5% for the same period in 2025. The increase in our effective tax rate for the second quarter and for the first six months of 2026 was primarily due to $3 million of state income tax benefits recorded as discrete items in the second quarter of 2025 resulting from an approved reduction in our tax rate in Texas and job credits in South Carolina, and a decrease in our tax deduction from stock-based compensation accounted for as a permanent difference.

OFF-BALANCE SHEET TRANSACTIONS

We have no significant off-balance sheet transactions.

UFP INDUSTRIES, INC.

LIQUIDITY AND CAPITAL RESOURCES

The table below presents, for the periods indicated, a summary of our cash flow statement (in thousands):

In general, we fund our growth through a combination of operating cash flows, our revolving credit facility, and issuance of long-term notes payable at times when interest rates are favorable. We have not issued equity to finance growth except in the case of a large acquisition that occurred many years ago. We manage our capital structure by attempting to maintain a targeted ratio of debt to equity and debt to earnings before interest, taxes, depreciation and amortization. We believe this is one of many important factors to maintaining a strong credit profile, which in turn helps ensure timely access to capital when needed.

Seasonality has a significant impact on our working capital due to our primary selling season which occurs during the period from March to September. Consequently, our working capital typically increases during our first and second quarters resulting in negative or modest cash flows from operations during those periods. Conversely, we tend to experience a substantial decrease in working capital once we move beyond our peak selling season which typically results in significant cash flows from operations in our third and fourth quarters.

Due to the seasonality of our business and the effects of the Lumber Market, we believe our cash cycle (days of sales outstanding plus days supply of inventory less days of payables outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle remained at 59 days during the second quarter of 2026 and increased to 63 days from 60 days during the first six months of 2026 compared to the same periods of the prior year.

The increase in our days supply of inventory for the first six months of 2026 is due to slower inventory turns in our Retail segment as a result of an increase in safety stock and weaker than anticipated demand in the first quarter. We continue to focus on past due account balances with customers, and the percentage of our accounts receivable that are current was 94% at the end of the second quarter of 2026 and 2025.

In the first six months of 2026, our cash flows from operations were $61 million which consisted of net earnings of $134 million and $95 million of non-cash expenses, partially offset by a $169 million increase in working capital since the end of December 2025 due to seasonal demand. Our cash flows from operations decreased by $52 million compared to the same period of 2025 primarily due to the decline in our net earnings as well as the increase in our investment in net working capital since year end, which was $2 million higher in the first six months of 2026 compared to the first six months of 2025. We anticipate the seasonal increase in net working capital in 2026 will be converted to cash by early in the fourth quarter.

UFP INDUSTRIES, INC.

Purchases of property, plant, and equipment comprised $87 million of our cash used in investing activities during the first six months of 2026. Outstanding purchase commitments on existing capital projects totaled approximately $108 million on June 27, 2026. Capital spending primarily consists of several projects to expand capacity to manufacture new and value-added products, primarily in our Packaging segment and Deckorators business units, to achieve efficiencies through automation in all segments, and make improvements to a number of facilities. We intend to fund capital expenditures and purchase commitments through our operating cash flows for the balance of the year. Cash used for acquisitions during the first six months of 2026 totaled $122 million (refer to Note F to our unaudited interim condensed consolidated financial statements).

Cash flows used in financing activities during the first six months of 2026 primarily consisted of the following:

• We repurchased 1,669,770 shares of our common stock for $142 million during the first six months of 2026 at an average price of $84.95 per share. Of this amount, 14,187 shares were repurchased in order to settle tax withholding obligations of long-term stock incentive plan participants’ awards which vested in the current year. The shares were purchased at an average price of $98.07 per share, totaling $1.4 million.
• Dividends paid during the first six months of 2026 were $40 million. The quarterly dividend of $0.36 per share represents a 3% increase from the quarterly dividend of $0.35 per share paid in 2025.

On June 27, 2026, we had no amount outstanding on our $750 million revolving credit facility, and we had approximately $708 million in remaining availability after considering $42 million in outstanding letters of credit under the revolving credit facility. Financial covenants on the unsecured revolving credit facility and unsecured notes include minimum interest tests and a maximum leverage ratio. The agreements also restrict the amount of additional indebtedness we may incur and the amount of assets that may be sold. We were in compliance with all of our covenant requirements as of June 27, 2026.

At the end of the second quarter of 2026, we had approximately $1.9 billion in total liquidity, consisting of our cash, remaining availability under our revolving credit facility, and a shelf agreement with certain lenders providing up to $575 million in remaining borrowing capacity.

ENVIRONMENTAL CONSIDERATIONS AND REGULATIONS

See Notes to Unaudited Interim Condensed Consolidated Financial Statements, Note E, “Commitments, Contingencies, and Guarantees.”

CRITICAL ACCOUNTING POLICIES

In preparing our consolidated financial statements, we follow accounting principles generally accepted in the United States. These principles require us to make certain estimates and apply judgments that affect our financial position and results of operations. We continually review our accounting policies and financial information disclosures. There have been no material changes in our policies or estimates since December 27, 2025.

FORWARD OUTLOOK

Our long-term financial goals include:

• Growing our annual unit sales by 7 to 10 percent (including smaller tuck-in acquisitions) with at least 10 percent of all sales coming from new products;
• Achieving and sustaining a 12.5 percent adjusted EBITDA margin by continuing to enhance our capabilities and grow our portfolio and sales of value-added products, expanding geographically in our higher margin business units, and achieving operating improvements;
• Earning an incremental return on new investment over our hurdle rate of 15 percent; and
• Maintaining a conservative capital structure.

UFP INDUSTRIES, INC.

We believe improvements in demand in the end markets we serve and effectively executing our strategies will allow us to achieve our long-term goals. However, in the short-term, demand in our markets has contracted due to a variety of macro-economic and geopolitical factors, which will continue to impact our results and vary depending on the severity and duration of this cycle. As a result of these more challenging conditions, we have developed and are executing plans to reduce or eliminate capacity at locations that are not meeting our profitability targets and reduce our SG&A costs. At the beginning of 2025, we announced that our goal through these actions was to improve our operating profits by $60 million by the end of 2026. We are on track to deliver the remaining $25 million or more from this cost out program by year end, with most to be realized in the third and fourth quarters. Additionally, we anticipate:

• Core SG&A will be approximately $580 million for the year. In addition, we anticipate sales incentives will be 3% of gross profit (3% of gross profit in 2025), bonus expense will range from 17% to 18% of pre-bonus operating profits (17% of pre-bonus operating profits in 2025), and vesting expense associated with incentive shares granted in prior years will total $24 million ($28 million in 2025).
• Depreciation, amortization and other non-cash expenses will be approximately $211 million for the year.
• An annual effective tax rate between 25% and 26%.

The following factors should be considered when evaluating our future sales and gross profit:

• We anticipate lumber prices will remain near current levels, and experience typical seasonal trends, until there is a substantial change in the balance of supply and demand. Transportation constraints may also cause prices to remain elevated, mitigating a typical decline in prices as the peak selling season comes to an end. In the event new tariffs are enacted on imports, we anticipate lumber prices will increase accordingly. We believe we are currently in a strong position to adapt quickly to new tariffs without adverse financial impact after a short adjustment period. Approximately 84% of our purchases of lumber are from domestic sources.
• A combination of macroeconomic and geopolitical events and capacity constraints in the flatbed carrier market have resulted in an increase in certain of our input and transportation costs. We anticipate that these costs will remain elevated for the foreseeable future. While our intention and operating practices are to pass these costs on to customers in our pricing, there are a variety of factors beyond our control that may impact our ability to be successful in these efforts.
• Retail sales accounted for 40% of our net sales for the first six months of 2026. When evaluating future demand for the segment, we analyze data such as the same-store sales growth of national home improvement retailers and forecasts of home remodeling activity. Based on this data, we currently anticipate market demand to be down low single digits for the remainder of 2026. We anticipate market growth and share gains in our composite decking and railing products will contribute approximately $100 million of sales growth in our Deckorators business unit in 2026, however our current backlog of ordered but unshipped Surestone™ decking is approximately $30 million as we continue to make progress optimizing capacity. We anticipate recent investments in equipment to improve the manufacturing throughput and lower the cost of our Surestone™ decking products will result in margin improvements in those products in 2026 as the new capacity is effectively brought on-line and once the higher cost inventory is sold.
• Packaging sales accounted for 25% of our net sales for the first six months of 2026. When evaluating future demand, we consider a number of metrics, including the Purchasing Managers Index (PMI), durable goods manufacturing, and U.S. real GDP. We currently believe overall demand in the markets we serve to be down low single digits for the remainder of 2026, primarily due to softening demand in our PalletOne business unit. We anticipate share gains in each of our business units will help mitigate weaker demand.

UFP INDUSTRIES, INC.

• Construction sales accounted for 30% of our net sales for the first six months of 2026.
• The Site-Built business unit accounted for approximately 10% of our net sales for the first six months of 2026. Approximately one-third of site-built customers are multifamily builders. The industry consensus estimate of national housing starts for 2026 is 1.35 million, with estimates generally predicting flat to mid-single digit growth in the coming year with multi-family showing slightly weaker performance compared to single-family. We anticipate demand in the regions we operate to be down low to mid-single digits for the remainder of 2026. Despite the softer near-term demand outlook, our backlog has increased as a result of several newly awarded projects for which contracts are in place, with projected margins generally consistent with those of other recent projects. As of June 27, 2026 and June 28, 2025, we estimate that our backlog of orders in our Site-Built housing business unit were $117 million and $59 million, respectively. The increase was primarily related to multi-family projects in the Northeast.
• The Factory-Built housing business unit accounted for 12% of our net sales for the first six months of 2026. When evaluating future demand, we analyze data from production and shipments of manufactured housing. Year to date industry production is down 8%. We currently believe overall demand will be down low to mid-single digits for the remainder of 2026.
• The Commercial construction and Concrete Forming business units accounted for approximately 8% of our net sales for the first six months of 2026. When evaluating future demand, we analyze data from non-residential construction spending. We anticipate modest growth in overall demand of these business units for the remainder of 2026.

Capital Allocation:

We believe the strength of our cash flow generation and conservative capital structure provide us with sufficient resources to grow our business and also fund returns to our shareholders. We plan to continue to pursue a balanced and return-driven approach to capital allocation across dividends, share buybacks, capital investments and acquisitions.

• On July 22, 2026, our board approved a quarterly cash dividend of $0.36 per share, which represents a 3% increase from the 2025 dividend rate. This dividend is payable on September 15, 2026, to shareholders of record on September 1, 2026. We continue to consider our payout ratio and yield when determining the appropriate dividend rate and have a long-term objective of increasing our dividend in line with our earnings growth.
• On May 29, 2026, our board authorized the repurchase of up to $300 million worth of our shares through April 30, 2027. This share authorization supersedes and replaces our prior share repurchase authorizations. Our objective is to repurchase our stock at sufficient amounts to offset issuances under our share-based compensation plans. In addition, we will allocate more of our free cash flow to opportunistically buy shares when the price trades at pre-determined levels we believe are at a significant discount to intrinsic value. Through August 4, 2026, we have approximately $273 million of remaining availability under this authorization.
• Our targeted range for capital expenditures for 2026 is $175 to $200 million and will continue to be impacted by extended lead times required for most equipment and rolling stock as well as the time required for site selection in the case of investments in new locations. Priority continues to be given to projects that enhance the working environments of our plants, take advantage of automation opportunities, and drive strategies that have strong long-term growth potential for new and value-added products. Certain planned capital projects have been canceled as we evaluated acquisition opportunities as an alternative means of adding capacity rather than investing in greenfield operations.
• We continue to pursue a healthy pipeline of acquisition opportunities of companies that are a strong strategic fit and enhance our capabilities while providing higher margin, return, and growth potential.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We are exposed to market risks related to fluctuations in interest rates on our variable rate debt, which consists of a revolving credit facility and industrial development revenue bonds. We do not enter into any material interest rate swaps, futures contracts or options on futures, or other types of derivative financial instruments to mitigate this risk.

UFP INDUSTRIES, INC.

For fixed rate debt, changes in interest rates generally affect the fair market value, but not earnings or cash flows. Conversely, for variable rate debt, changes in interest rates generally do not influence fair market value, but do affect future earnings and cash flows. We do not have an obligation to prepay fixed rate debt prior to maturity, and as a result, interest rate risk and changes in fair market value should not have a significant impact on such debt until we are required to refinance it.

We are subject to fluctuations in the price of lumber. We experience significant fluctuations in the cost of commodity lumber products from primary producers (the “Lumber Market”). A variety of factors over which we have no control, including government regulations, tariffs and trade policies, transportation, environmental regulations, weather conditions, economic conditions, and natural disasters, impact the cost of lumber products and our selling prices. While we attempt to minimize our risk from severe price fluctuations, substantial, prolonged trends in lumber prices can affect our sales, cost of materials, and gross profit. (See “Impact of the Lumber Market on Our Operating Results”).

Our international operations have exposure to foreign currency rate risks, primarily due to fluctuations in their local currency, which is their functional currency, compared to the U.S. Dollar. Additionally, certain of our operations enter into transactions that will be settled in a currency other than the U.S. Dollar. We may enter into forward foreign exchange rate contracts in the future to mitigate foreign currency exchange risk. Historically, our hedge contracts have been immaterial to the financial statements.

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Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. With the participation of management, our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in SEC Rules 13a–15(e) and 15d–15(e)) in the manner required by SEC Rule 13a-15(b) and 15d-15(b), have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

(b) Changes in Internal Controls. During the quarter ended June 27, 2026, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1A. Risk Factors.

There have been no material changes to the risk factors disclosed in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 27, 2025, as updated by the Part II - Item 1A Risk Factors of our Quarterly Report on Form 10-Q for the quarter ended March 28, 2026.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Director Compensation Plan

(a) A portion of the annual retainer payable to each of our non-employee directors (such portion for each director is $135,000 for 2026) is paid in shares of our common stock. The retainer is deemed earned in equal quarterly installments on February 1, May 1, August 1, and November 1. We use the market price per share on each such installment date (or the preceding day if there were no trades on that installment date) to determine the number of shares issuable to each non-employee director, and except as described below, the shares are issued to the director within five business days.

UFP INDUSTRIES, INC.

We maintain a Director Compensation Plan (the “Plan”) pursuant to which non-employee directors can elect to (1) receive shares of our common stock, on a deferred basis, in lieu of all or a portion of the annual retainer payable to the director in cash (which deferred cash is used to purchase our common stock on a deferred basis at the rate of 110% of the deferred cash amount), and/or (2) defer receipt of all or a portion of the annual retainer payable to the director in the form of our common stock. Any shares of common stock issuable to a director on a deferred basis pursuant to the Plan are not actually issued until the deferred payment date specified pursuant to the Plan, which is typically after a director’s retirement from the Board. However, on the date such shares are deemed earned by the director, we issue deferred stock units (“DSUs”) to a bookkeeping account for each director to represent the shares issuable in the future pursuant to the Plan. Directors who have DSUs credited to their account pursuant to the Plan receive additional DSUs credited to their account whenever a dividend is paid on the Company’s common stock.

On May 1, 2026, the Company issued 1,196 shares of its common stock to non-employee directors as part of the annual retainer payable to directors in stock (i.e., shares that were issued on a current basis and not deferred pursuant to the Plan). The Company issued all shares described in this paragraph pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933 due to the fact that the issuance of the shares was made on a private basis pursuant to the Plan.

Deferred Compensation Plan

We maintain a Deferred Compensation Plan (the “DCP”) which allows key employees to defer a portion of their salary and/or cash incentive compensation. Participants in the DCP may elect to invest the deferred amounts in certain investment alternatives, including our common stock. Also, under the DCP, if a key employee’s ownership of our common stock is below certain targeted thresholds, the amount of deferral must be used to invest in shares of our common stock. All amounts deferred to the DCP that are invested in our common stock are invested at a price per share representing a 15% discount to the prevailing market price of our stock. In general, each employee receives a payout of his or her DCP account one year from the date her or she terminates employment with the Company, unless termination of employment is due to retirement, death or change in control, in which case the employee or his or her beneficiary may receive the distribution earlier, subject to DCP provisions.

The Company issued all shares described in this paragraph pursuant to an exemption under Section 4(2) of the Securities Act of 1933 due to the fact that the issuance of the shares was made on a private basis pursuant to the DCP. On February 19, 2026, we issued a total of 61,748 shares to employees who elected to defer a portion of their annual incentive bonus into our common stock. In addition, shares were issued on the respective employees’ last payroll dates in each month. During 2026 we issued 19,428 shares to employees who elected to defer a portion of their salaries into our common stock, which were as follows:

(b) N/A.

UFP INDUSTRIES, INC.

(c) Issuer purchases of equity securities.

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Note: May includes 2,191 shares tendered by certain employees of the Company (and repurchased by the Company) in order to satisfy their respective tax withholding obligations resulting from the vesting of restricted stock awards. The Company treats these share repurchases against its board-approved share repurchase authorizations described below.

(1) Total number of shares purchased.

(2) Average price paid per share.

(3) Total number of shares purchased as part of publicly announced plans or programs.

(4) Approximate dollar value of shares that may yet be purchased under the plans or programs.

(1) A total of 1,139,579 shares reported as repurchased between March 29, 2026 and May 30, 2026 in the table above were repurchased pursuant to the share repurchase authorization approved by our board on July 23, 2025 to repurchase up to $300 million worth of our common stock through July 31, 2026. On and effective as of May 29, 2026, our board authorized the repurchase of up to $300 million worth of shares of our common stock through the period ending April 30, 2027. This authorization supersedes and replaces any prior authorization. The balance of shares reported for the period from May 31, 2026, through June 27, 2026 were purchased pursuant to the new share authorization.

Item 5. Other Information.

During the quarter ended June 27, 2026, no director or officer adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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UFP INDUSTRIES, INC.

PART II. OTHER INFORMATION

Item 6. Exhibits.

The following exhibits (listed by number corresponding to the Exhibit Table as Item 601 in Regulation S-K) are filed with this report:

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UFP INDUSTRIES, INC.

​ ​ ​

Date: August 5, 2026 By: /s/ William D. Schwartz, Jr.

​ William D. Schwartz, Jr.,

​ Chief Executive Officer and

​ Principal Executive Officer

​ ​ ​

Date: August 5, 2026 By: /s/ Michael R. Cole

​ Michael R. Cole,

​ Chief Financial Officer,

​ Principal Financial Officer and

​ Principal Accounting Officer

​

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